How the post-flint effect could continue to affect industry

This post originally appeared onEnablon Insights aspart of a three-part series,Between Flint and a Hard Place.Thefirst postidentified how lead in the drinking water in Flint, Michigan sparked a heightened awareness about water quality in the U.S. Thesecond postdove deeper into water contamination trends affecting industry actors, analyzing how Flint, an issue created by public officials, may have inspired more stringency in enforcement proceedings. This third and final post asks if it is accurate to say trends for increased risks to industry from contaminated water situations exist and supposing they do, are they likely to continue?

This series of posts began last year by examining what here will be called the “Post-Flint Effect,” describing what happened after lead was found in Flint, Michigan’s drinking water in early 2015. Following the very public crisis in Flint, there seemed to be a ripple of heightened public activism, government actions, and increased damage awards in water contamination proceedings throughout the U.S.A. Even though Flint was a government-created issue, throughout the U.S.A., private industry dischargers and potentially responsible parties were being told to cure water contamination situations, some of which had been ignored by regulators for years.

This final post asks whether the Post-Flint Effect really exists and if it does, is it likely to continue to impact private industry, especially given recent political shifts for environmental enforcement priorities in the federal government.

The Post-Flint Effect, Continued

There are indications that regulator actions and court damages verdicts have increased since Flint, potentially impacted by public activism. Numerous examples were given in the two previous posts to suggest industry should be wary of the seeming Post-Flint Effect.

For a recent example indicating that regulators are treating water contamination more seriously than pre-Flint, we can look at another Michigan community. Years ago, Ann Arbor residents and their local officials began requesting that the Michigan Department of Environmental Quality (MDEQ) issue morestringent standards for 1,4-dioxane, a suspected carcinogen. The Ann Arbor groundwater was contaminated by a spreading dioxane plume from Gelman Sciences, which discharged the chemical at its medical devices manufacturing facility during the 1960s and 1980s. Post-Flint, on October 27, 2016, the MDEQ and Governor Rick Snyder issued state-wide, stricter, emergency regulations for dioxane that included a residential vapor intrusion screening criterion, which was not a standard that existed previously. Other states, like Vermont, had also issued emergency, stricter standards for potential carcinogens contaminating groundwater.

Additionally, as was proposed in the first two posts in thisseries, the courts are frowning on industrial polluters with deeper forehead creases. The Michigan dioxane issue is another example. Although Gelman Sciences has negotiated numerous contamination lawsuits with the MDEQ, in a December 2016 hearing, a circuit county judge opened the dioxane cleanup proceedings to allow local governments, like Ann Arbor, to intervene and argue for a better cleanup in the case. Before the MDEQ issued the emergency dioxane standards, there was no legal remedy that individuals with high dioxane levels in their water could seek.

A court in Colorado has also opened more litigation avenues for individuals, including preventing contaminations before they start. On March 23, 2017, theColorado Court of Appeals heldthat Colorado is required to place interests for public health and environmental protection above the interests of the oil and gas industry to perform fracking.

Does the Post-Flint Effect Really Exist?

For Ann Arbor and other parts of Michigan, perhaps the Post-Flint Effect is alive and well. It seems likely that the timing for issuing standards for dioxane is significant because Governor Snyder and the MDEQ were and continue to be at the center of the Flint, Michigan water crisis and have made new, post-Flint assurances on drinking water in Michigan. However, against the Post-Flint Effect theory is the MDEQ seeming to agree with the manufacturer that discharged the plume and even questioning whether a more aggressive cleanup of the dioxane plume in the state is really warranted, which could allow the plume to continue its spread through other communities’ groundwater toward the Huron River, where it may eventually be diluted to safer levels.

The EPA has not yet identified the plume as a Superfund site because the MDEQ has primary regulatory authority. However, the affected communities have, in something that could be considered Post-Flint Effect hopes, sent a Superfund cleanup petition to the EPA, which did announce in February 2017 that it would perform preliminary research into listing the plume. If it is listed, it is likely that Gelman Sciences will be required to cure the contaminated groundwater and stop the plume from its continued spread into other communities.

Additionally, while Colorado cannot legally put the economic interests of the oil and gas industry above public health and safety, in a very non-Post-Flint Effect way, regulators have not changed behavior and stopped the siting of a new fracking facility within 1,350 feet of a middle school. Public ire has already dropped this issue back into the courts though, and on April 11, 2017, numerous plaintiffsbrought a case against the Colorado Oil and Gas Conservation Commissionseeking declaratory and injunctive relief to the industrial project.

Perhaps then, the Post-Flint Effect exists, but the legacy will reside less with a heightened sense of responsibility by state government actors and more with increased access to the courts, more burdensome damage awards on industry, and the federal government stepping in when the public can’t get local traction for change.

Will the Post-Flint Effect Continue?

On October 1, 2016, the EPA identified that its Enforcement Initiatives for the 2017-2019 cycle would include reducing risks of accidental releases at industrial chemical facilities and keeping industrial pollutants out of the nation’s waters under its Clean Water regulations. Trump’s campaign promise to make “crystal clear, clean water” a priority also seemed to indicate that Flint was an important lesson and the federal government would improve water protections. However, in his first 100 days, President Trump pressed for a significantly reduced budget for the EPA and Congress introduced bills to repeal the EPA altogether. President Trump also directed federal agencies, especially the EPA, to significantly reduce regulations, including those protecting water sources.

While the first Congressional budget vote during President Trump’s administration only reduced the EPA’s budget by one percent, the agency is likely to be under constant risk for budget reductions over the next few years. This could mean enforcement of water contamination events will not be as stringently enforced as previously thought, especially in states where the EPA is the primary regulator, regardless of the water contamination events exposed since Flint.

Regarding the U.S.’s navigable waters and industry discharges, President Trump directed the EPA and the Army Corps of Engineers (USACE) to review and revise the Waters of the United States Rule (WOTUS).Executive Order (EO) 13778also directed the agencies to promote economic growth, which – as seen in the Colorado oil and gas case, above – is often at odds with community desires for pollution prevention.

EO 13778 does not impact industry directly, but it could lead to less stringent permit revisions or different requirements all together. It requires federal agencies to perform across the board review, revision, and repeal of federal rules and policies impacted by WOTUS. This would indicate that any existence of a Post-Flint Effect will not continue, at least not under federal leadership.

But, if the Post-Flint Effect is not about what government will do on its own initiative, then it’s about the public demanding increased accountability from regulators and courts granting plaintiffs increased access to sue industry and provide larger verdict awards because of the harms caused during permitted, industrial activities.

If permitted activities continue to end up in courts, it is likely that damage awards will cost companies more, especially as juries may have sympathetic ears and because the U.S. Supreme Court has denied appeals from companies to overturn rulings for larger verdicts awarded in water contamination suits in the states. Also, even though the federal government may not lead in creating more stringent standards and requirements under the Trump Administration, industry could be impacted by states like Michigan where more stringent standards mean additional treatment measures and money from discharging or spilling facilities.

Bills in Michigan and Vermont also seek to make new, automatic corrective action requirements for anyone who contaminates water sources. For example, as Vermont litigates with a company over its responsibilities to cure PFOA-contaminated water, the state’s senate and house have passedS.10to make a polluter automatically liable for the cost of extending water supply lines from a public water system to contaminated properties. As other states similarly negotiate with industry dischargers over contaminated waters, similar bills in other jurisdictions seem likely.

What Should Industry Watch For?

Even with severely restricted enforcement budgets, this isno guarantee to dischargers that EPA or any other budget-constrained regulators will slack enforcement. Regulators have numerous options to provide for water safety.

When the EPA’s budget was significantly reduced during the Obama Administration, the EPA turned to new technologies for cost-effective compliance and enforcement. Among these “next generation compliance” techniques,regulators can expand transparency by making information more accessible to the public. For example, on May 5, 2017, the DEP announced its newGIS Open Data Sitethat maps Pennsylvania’s environmental information. The DEP’s site aggregates and simplifies DEP’s public data that gives the public raw data to use for analysis, visualization, and sharing. As litigation, public protests, and brand-boycotting are being used more and more in recent past months to alter government and corporate actions,increased data transparency could likely result in increased public activism and lawsuits against non-compliant companies or any chemical dischargers in areas where water is contaminated.

What Should Industry Do?

Remaining compliant with existing laws and regulations on an on-going basis is the logical place for industrial operators to start. This is where the Enablon platform, fully integrated with theEnhesa Compliance Intelligence regulatory content, can help (providing clear concise analysis of requirements from the U.S.A.’s Federal and State jurisdictions within the EnablonAudit ManagementorCompliance Managementmodules). The Ann Arbor community could not seek remedy from the dioxane discharger until the MDEQ lowered the dioxane standards, so compliance is a great first step to stave off lawsuits.

As mentioned in thesecond postin this series, companies that use chemicals that could contaminate drinking water sources may also find it useful tocomply with more stringent self-regulation standards or thoroughly review facility-specific chemical use, storage, and waste management protocolsto see if there are contamination risks that can be better managed. Companies may also find it useful toreview the kinds of chemicals they use or store on site, and identify potential dangers to humans from those chemicals, such as any chemicals identified as likely carcinogens, and if it is feasible, switch to a less toxic alternative.

Additionally, work with local communities to preemptively address existing water contamination concerns in their communities. This could prevent accusations in the future or lead to innovative corrective action solutions in the case of a spill.

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